'Big six' energy supplier E.On says it is raising its standard variable tariff (SVT) by 10% - in line with a relaxation of the price cap imposed on the industry.

The company made its move after Ofgem announced last Thursday that the cap on so-called default tariffs, designed to prevent rip-off gas and electricity bills, would rise by £117 to £1,254 from 1 April.

The regulator said the increase would reflect higher wholesale energy costs.

The controversial cap was first introduced in January and covered the 11 million households on default tariffs.

These are the bills customers are automatically switched on to unless they move to a new energy deal or provider.

An E.On spokesperson said its increases covered the new price cap level announced by Ofgem.

She said: "In line with that, we'll be making changes to our standard variable tariff prices from 1st April and expect to see similar movements across the energy industry."

The regulator said last week it expected the higher cap to still save customers up to £100 a year on average.